The Department of Justice announced today that it has intervened in a whistleblower suit involving a $2.65 billion contract with CH2M Hill Hanford Group Inc. to clean up underground radioactive waste at the Hanford Nuclear Reservation.
But the whistleblower, former CH2M employee Carl Schroeder, isn't likely to see any of the proceeds. Schroeder pled guilty in November to conspiracy to defraud the United States for his participation in the scheme, and The False Claims Act bars recovery by any whistleblower who is convicted of criminal conduct for his role in the fraud.
CH2M was awarded a contract by the Department of Energy in October 1999 to manage and clean up more than 170 of Hanford's underground storage tanks containing mixed radioactive and hazardous waste.
The Hanford facility in southeastern Washington State produced most of the plutonium for the United States' arsenal of nuclear weapons.
Thousands of people who lived nearby later sued the government, alleging emissions from the plant caused cancer and other illnesses. That litigation is ongoing.
The site's cleanup -- the largest and most expensive such project in the world -- is not expected to be completed until 2047, 60 years after plutonium production ceased.
The CH2M contract was cost-plus, which meant the company paid its hourly workers, then billed the government for the expenses, plus overhead, profits and incidentals.
"The more wages billed by hourly employees, the more fees CH2 made under the contract," states the whistleblower complaint, filed in 2009 by Jackson Schmidt of Pepple Johnson Cantu & Schmidt in U.S. District Court for the Eastern District of Washington. "CH2 falsely and fraudulently billed the DOE for work performed."
According to the complaint, workers routinely worked only a few hours of overtime at night, but claimed a full eight hours on their time sheets. "The practices were so widespread that they can only be described as the official employment policy of CH2," the complaint alleges, charging that company managers were aware of and even encouraged the practice.
To date, eight former workers including whistleblower Schroeder have pled guilty to felony charges stemming from time card fraud. The United States has notified the court that it expects to file a motion to dismiss Schroeder from the case.